Taking ARCx Private
The first token to be un-launched
A crypto summer, an eon ago, at ARCx we launched a token.
Today, we’re announcing that we are taking ARCx private.
It’s not easy to change such an important decision, however there’s more to be gained from moving forward rather than being static.
For the past few months, the token has been a major distraction in our journey to make on-chain identity real. The next phase of ARCx is very exciting and taking the token private allows us to go all-in on this.
How will it work?
Effectively we're willing to buy out any token holders who want an exit out now and take the remaining with us for a journey that's longer term.
You can read the official blog post here with all the specific details:
Why not stay public?
Unfortunately, public crypto markets are immature for a few reasons:
Retail looks for superficial reasons to purchase a token (fake marketing/ponzi schemes)
Sophisticated investors need to keep marking up rounds to their LPs in order to grow their fund. Number goes down = no future fund.
You need clear value creation and value capture demonstrated. Figuring it out is not okay to public investors.
Liquidity is expensive to maintain and reduces runway for small and nimble teams. It is fundamentally a misallocation of capital.
Valuations make little sense. We have more than two times the amount of USDC in our treasury relative to the market cap of the token.
I do think this will change in the future but I believe in surfing with the wave rather than swimming against it.
The perverse incentives to "pump the token" creeps into every decision and every team member's subconscious (no matter how hard you push against), which detracts from the ultimate goal: to create lasting, long term value.
I’ll be writing more about this in depth in future blog posts.
What’s next?
We plan to re-launch the token in the future, but before we do, profitability will be a key metric. If you're a token that isn't profitable, there's only one direction the token can go: down.
Looking at metrics such as CAC/LTV, earnings, churn, growth are going to be much more carefully evaluated.
We’re entering a new phase of crypto where the hard numbers matter more. Best to align to it rather than getting swept away. If you're a founder that has a token and want to jam about the reality you're facing -- let me know. My DMs are open.
Token investors have rights in the US. U cannot do this without a vote by existing ARCX holders